Samacheer Kalvi 12th Commerce Notes Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

→ Management by objectives is a management system in which each member of the organization effectively participates and involves himself. This system gives full scope to the individual strength and responsibility.

→ Prof. Reddin defines MBO as “the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time bound objectives linked vertically and horizontally and with future planning”.

→ An attempt is made by the management to integrate the goals of an organization and individuals. This will lead to effective management, MBO tries to combine the long run goals with shortrun goals. It increases the organizational capability of achieving goals at all levels. It encourages a climate of trust, goodwill and a will to perform.

→ The process of MBO is defining organizational objectives, goals of each section, fixing key result areas, targets, matching resources. Periodical review meeting and appraisal of activities.

→ Management by exception is an important principle of managerial control suggested by the classical writers on management. It is style of business management that focuses on identifying and handling cases that deviate from the norm.

→ Management by exception provides the following benefits. It saves the , time of managers because they deal only with exceptional matters. Routine problems are left to sub-ordinates. It facilitates delegation of authority. It provides better yardstick for judging results. It is helpful in objective performance appraisal.

Discussion on the various functions of management, how it helps to MBE

  1. A process of continuing and related activities.
  2. Involving and concentration on organisational goals.
  3. Achieves organizational goals by working with people and resources management by exception is a way of separating tasks between staff and management.
  4. To reduce managerial load.
  5. Exception management also has an IT application.
  6. The management that gives employees the responsibility to take decisions and fulfill their work or projects by themselves.

State your own view about MBO and MBE need to the management

  1. Manager should create a action plan aimed at organisational goals.
  2. How to distribute the resources and to organise their employees according to the plan.
  3. Time to spend with their employees on interpersonal managing task communicating motivating and encouraging employees to achieve higher level of productivity.
  4. MBO is a practice of management that empower employees take part in goal setting process.
  5. MBE is method of control. It is helpful in objective performance appraisal.

Make your own project about MBO and MBE with some examples
Online Marketing:
It is a tool for know the behaviour of non-sales related activities. Those in digital or online marketing are tasked with something to increasing site traffic conversion. A broader organisational goal in this regard “Increase brand authority” and become an industry influence.

MBE with project management. It is well organised meeting. To conduct regular meeting to keep up with the progress of project.

Sales Management:
To solving the problems, improving marketing the product and product development.

The company gets 30% of marginal profit for every year, but not increasing the salary of the employees for last three years. The employees conduct the indefinite strike against the company. Assume you are the manager of the company. How to solve the problem with using MBO or MBE?

To solve the problem using MBO to motivates the employees and to make them to understand their responsibilities and their role to achieve their goal with organisational goal. The strike may be stopped through this system (MBO) to give full strength of the organisation.

Samacheer Kalvi 12th Commerce Notes